Pros and cons of using the unit of production depreciation method
Journal Article
·
· Oil Gas Tax Q.; (United States)
OSTI ID:6784965
The method of depreciation employed in recovering the cost of equipment used in the extraction of natural resources has an effect on a number of other tax aspects of that activity. The depreciation deduction affects percentage depletion allowed the taxpayer, through the 50 percent of the taxpayer's taxable income from the property limitation and the 65 percent of the taxpayer's taxable income limitation. Depreciation expense also affects the windfall profit tax liability through the net income limitation. Additionally, the alternative minimum tax calculation is influenced by the depreciation method used; i.e., accelerated methods may result in a tax preference item. Taxpayers operating in the corporate form must consider the interplay of the depreciation deduction allowed for earnings and profits purposes and the depreciation deduction allowed in determining taxable income.
- Research Organization:
- Texas Tech Univ., Lubbock
- OSTI ID:
- 6784965
- Journal Information:
- Oil Gas Tax Q.; (United States), Journal Name: Oil Gas Tax Q.; (United States) Vol. 32:4; ISSN OGTQD
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
02 PETROLEUM
021000* -- Petroleum-- Legislation & Regulations
03 NATURAL GAS
031000 -- Natural Gas-- Legislation & Regulations
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002 -- Energy Planning & Policy-- Petroleum
294003 -- Energy Planning & Policy-- Natural Gas
COST
DEPRECIATION
EQUIPMENT
FIELD PRODUCTION EQUIPMENT
FINANCIAL INCENTIVES
INDUSTRY
LAWS
NATURAL GAS INDUSTRY
PETROLEUM INDUSTRY
TAX LAWS
TAXES
021000* -- Petroleum-- Legislation & Regulations
03 NATURAL GAS
031000 -- Natural Gas-- Legislation & Regulations
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002 -- Energy Planning & Policy-- Petroleum
294003 -- Energy Planning & Policy-- Natural Gas
COST
DEPRECIATION
EQUIPMENT
FIELD PRODUCTION EQUIPMENT
FINANCIAL INCENTIVES
INDUSTRY
LAWS
NATURAL GAS INDUSTRY
PETROLEUM INDUSTRY
TAX LAWS
TAXES